How does the Red Cross spend donor money? It’s a “trade secret”

posted at 9:31 am on July 6, 2014 by Jazz Shaw

The American Red Cross is such a long established and internationally acknowledged charitable institution, showing up to help people at the scene of every major disaster, that it’s hard to imagine anything nefarious about them. But as long, painful experience has shown us, whenever large sums of money are amassed in the vicinity of human beings all bets are off. With that in mind, an article from Sharyl Attkisson this week is worth a look as she examines The Secretive American Red Cross. In it, she highlights an article from ProPublica who have asked some uncomfortable questions about donations taken in following Hurricane Sandy and the possibly even more disturbing answers.

“Just how badly does the American Red Cross want to keep secret how it raised and spent over $300 million after Hurricane Sandy? The charity has hired a fancy law firm to fight a public request we filed with New York state, arguing that information about its Sandy activities is a ‘trade secret’…As we’ve reported, the Red Cross releases few details about how it spends money after big disasters. That makes it difficult to figure out whether donor dollars are well spent. The Red Cross did give some information about Sandy spending to New York Attorney General Eric Schneiderman, who had been investigating the charity. But the Red Cross declined our request to disclose the details.”

This is hardly Attkisson’s first run-in with the Red Cross.

On May 12, 2010 I reported for CBS News on how 5 major nonprofits, including the American Red Cross, had spent funds intended for Haiti earthquake victims four months after the disaster. I noted that enough aid had been raised to give each displaced family a check for $37,000 but thousands of Haitians were still going hungry and living under flimsy shelters. I learned that, to a large degree, the charities can’t tell anyone with specificity where exactly all the money goes. They can give general figures such as, ‘we’ve given out 10,000 meals’ or ‘we’ve distributed 10,000 bottles of water,’ but I wondered why there wasn’t a spreadsheet that explains how many bottles or meals were shipped to which refugee camp and when. It seems pretty basic. After all, somebody has to know. A lot of the funds that donors intended for “emergency relief” were, in fact, still sitting in funds unspent. Some charity officials privately acknowledged that many charities receiving a giant influx of donations in the wake of a giant disaster are ill-equipped to produce long term recovery programs. They sometimes find themselves frantically trying to figure out how to spend all the money in a responsible way that serves the mission.

The Red Cross has faced plenty of questions in the past, may centering on their handling of blood donations from generous citizens. The blood, given for free, winds up being discarded from slow or inefficient handling up to 14% of the time according to one investigative report from Forbes. And while you give the blood out of the goodness of your heart (sorry for the pun), the Red Cross sells it for anywhere from $210 a pint in Wisconsin to $265 in New Jersey And where does that money go, specifically? Apparently that’s a “trade secret” as well.

It was Attkisson herself who reported in 2012 that one New Jersey duo alone skimmed over a million dollars in funds which never reached the needy. And that was only one of many examples she uncovered in her award winning series. But when pressed for answers, the Red Cross refers you to their lawyers rather than discussing the details of where these hundreds of millions of dollars are going. There is no question that the American Red Cross does a lot of good work and many, many people do indeed receive relief thanks to their efforts. But that doesn’t mean that they are free from any questions and don’t owe some measure of accountability. It’s a disquieting story to be sure, and somewhat shocking when you realize that a charitable institution should be far more interested in portraying a clean profile and complete transparency when they rely entirely on the good will of the public for their existence.

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…The Red Cross used to charge the soldiers for the donuts and cigarettes they handed out during WW2…
Kissmygrits on July 6, 2014 at 9:45 AM

My uncle, a WWII B-17 pilot, told the same story — but even worse. They had been getting free coffee and donuts from the Salvation Army, then the Red Cross had the SA kicked out so they could take over — and started charging for the coffee and donuts.
I give ALL my donations — cash, clothes, etc. — to the Salvation Army.
fred5678 on July 6, 2014 at 11:10 AM

Wow! Just remembered my (still alive) 96-year-old dad talking about that. He was in Italy at the end of WWII waiting at a dock for a boat back to the States. The GIs had to trade in their money for scrip (or vice-versa, I can’t remember which). The Red Cross was there selling donuts and coffee, and they would not take the currency the hungry GIs had. They would not give them anything for free either. All the years since the Red Cross never got one dime from my dad, who donated a LOT to other organizations instead. :)

I never ever give the RC any money…. Remember the fraud Bill O’reilly uncovered some years ago/ And in the 1960′s they would not help a family member get home from Army base in Hawaii when her father died,,,Salvation Army or Samaraton Purse gets my money…

When I read stories like this, I just sit back and chuckle when anyone complains about “where their money went”.

BobMbx on July 6, 2014 at 9:48 AM

This is a profoundly sad statement. Be smart but give of your time, your treasure, and your talent. Charity is a “‘selfish’ endeavor because authentic charity is salvific. Consider local charities or several religious charities. Volunteer for a mission. Give of yourself always.

As for the blood: I have to defend that part. The money they charge for blood is calculated as a cost-to-collect fee… and it is very costly to collect blood. The staff at a blood drive is paid (by law, no more volunteers), then once the blood is collected it has to be safely stored, tested for a host of diseases, and and then transported twice (first to a storage facility, then later to a hospital when needed). It’s incredibly expensive to do this work, and if the ARC did not collect fees for it, they would have to stop collecting blood tomorrow. Trust me on this one…. no fees, no blood.

Gartrip on July 6, 2014 at 1:31 PM

Thank you for the insider information. I had always thought that handling blood was really expensive (although I wouldn’t have thought over $200 a pint).

This non-theist also gives to the Salvation Army and we do Operation Christmas Child every year with our kids, also because we trust Christians a lot more than leftists.

I quoted this question because although it’s not directed at me, I found it interesting and wanted to answer it from my point of view. I personally may find most Christians to be good, charitable people, but it doesn’t necessarily follow that I want to live just like them just because they run decent charities. I know I didn’t invent my moral code from scratch either; the morals I follow can be found in many belief systems from around the world. I don’t know a single non-believer who invented their belief system from whole cloth, but admittedly I don’t know more than two dozen personally.

Thanks for letting me butt in on this. :)

Anna on July 6, 2014 at 12:58 PM

Thank you for “butting in”.

I had wondered if non-theists gave to religious charities. A more important question in my mind was where a non-theist would get his or her moral code. Your comment is helpful to my understanding.

I heard similar stories from my family of the Red Cross selling coffee and donuts while the Salvation Army gave them away for free. My family still donates to the Salvation Army but never a red cent to the Red Cross.

In more recent times, the Red Cross had an aggressive fund raising campaign after 9-11, but not a lot of money went back out. Victim’s families wound up getting compensated by the government, and the Red Cross was not directly involved in the recovery. So where did those Billions go? Your guess is as good as mine, and the Red Cross isn’t saying.

The International Red Cross building in Europe, I understand, is very impressive. Nice digs for a charity. I had a friend that worked there and was very well compensated for her office skills.

The Salvation Army, on the other hand, does good for people all over the world. Everything that is donated is put to use in some way. They have a daily auction of unusable donations that people then take, or ship to places where the fabrics can be recycled, and the electronics cannibalized. Our son is a beneficiary of SA services and has made a greater recovery there than at any facility we could pay for (yes, we went down that road). Belief in Christianity is not a prerequisite, but it is much of the motivation that drives the people who serve the mission.

When you preface your sentence with, “There is no question that the American Red Cross does a lot of good work…” it is all for naught when the American Red Cross cannot be honest and forthright in detailing where that money goes. It places enough suspicion in my mind to add this organization to my list of “do not donate”, whether money or blood. Is that being unrealistic? In the environment today with every politician wanting to lie, cheat and steal, the American Red Cross along with many others, along with the politicians are creating a vacuum due to their conduct and we all know that nature abhors a vacuum.

When I read stories like this, I just sit back and chuckle when anyone complains about “where their money went”.

BobMbx on July 6, 2014 at 9:48 AM

This is a profoundly sad statement. Be smart but give of your time, your treasure, and your talent. Charity is a “‘selfish’ endeavor because authentic charity is salvific. Consider local charities or several religious charities. Volunteer for a mission. Give of yourself always.

cthemfly on July 6, 2014 at 7:55 PM

Why should any of us take your advice, cthemfly? The government steals thousands of dollars from us every year to give to people I wouldn’t turn my head to spit on. No, if you want to do that – fine. Taking care of your family is more than enough. After all, charity begins at home.

I gave blood to the Red Cross, but then they started calling me quite literally twice every single day asking me to go to some blood drive in the area. I finally set my phone to block their number. I’m happy to give blood when I can, but they were harassing me.

They are not a government agency so there is no requirement for them to disclose. Every charity files IRS statements of funds raised. Often the questions “investigators” want answered put an nfp in a position of revealing competitive intelligence. And the Red Cross is typically pretty transparent with donors who designate their contributions to a specific end. And statements such as the Red Cross didn’t give enough money to Haiti doesn’t understand that the Red Cross funds support disaster “relief” and not wholesale disaster “recovery”. And they can’t afford to deplete their general disaster relief fund to build houses in Haiti and then have no money in the pot for the next hurricane, typhoon, earthquake, tornado, flood or wildfire that happens the next week.